327 Uris HallCornell UniversityIthaca, NY 14853-7601

Department of Sociology

CSES Working Paper Series

Paper # 58

Richard Swedberg

"The Household Economy:

A Complement or Alternative to the Market Economy?"

2011

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Kindly do not cite without permission

The Household Economy: A Complement or Alternative to the Market Economy?

by Richard Swedberg Cornell University

Department of Sociology

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ABSTRACT The most common way of understanding economic life today is by looking at it in terms of the market. The market, it is generally agreed, is at the heart of the modern economy and is best understood with the help of the science of economics. In this paper I argue that it may also be possible to look at economic life from the perspective of another and equally important institution in economic life: the household. Three examples of households and their respective theoretization are presented and discussed: the estate in Ancient Greece and the theory of the oikos; the household in 19th century USA and home economics; and the modern household and Ellickson’s transaction cost approach to the household. The paper ends with a discussion of the household form, drawing on Weber’s conceptualization of the household in his economic sociology; and also with some suggestions for how to use the household model to improve economic life.

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The most common way of explaining economic life today is by looking at it in

terms of the market.1 The market, it is generally agreed, is at the heart of the modern

economy and is best understood with the help of economics. Modern economics is also

the most prestigious of all the social sciences; and it advocates a perspective based on

formal modeling, viewing the actors as operating in an environment of scarce resources,

while maximizing their utility.

This way of conceptualizing economic life has a powerful grip on the modern

imagination, in academia and elsewhere. But there also exist other ways of looking at

economic life. In this paper I will argue that economic matters can also be looked at from

a very different perspective: that of the household. As I will show, this constituted the

traditional way of looking at economic life, before the market became a major economic

institution and the center of economic thought. Production, distribution and exchange –

the three central processes in economic life according to modern economics – were at one

point all handled by the household.

When people today use the term “household” they tend to think of a family or, if

they have a social science background, of a small number of co-residents who consume

together. In this paper, in contrast, I will use household in a broader sense, as a distinct

institution that varies in size and has an important economic dimension. I will argue that

by proceeding in this way we will be in a position to better understand the earlier role of

the household in economic life. Only by looking at it from this broader perspective, I will

argue as well, is it possible to see how it also today may help us to better understand

1 This paper was presented at the annual meeting of the American Sociological Association in 2010 in Atlanta. It was originally written for a Swedish project and published in 2011 as ”Möjligheter for nationalekonomin, möjligheter for hushållet (Possibilities of Economics, Possibilities of the Household)”. Pp. 24-53 in Katarina Schoug (ed.), Om möjligheter – för människan och allt annat levande (Stockholm: Naturvårdsverket). While the theoretical focus on the household is special to this paper, some of the factual material can also be found in my 2009 article “The Centrality of Materiality” in (ed. with Trevor Pinch) Living in a Material World: Economic Sociology Meets Science and Technology Studies. (Cambridge: The MIT Press).

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economic life – and perhaps get a better grasp on the economic possibilities that are open

to us.

The paper is organized as follows. In the first half I will provide some detailed

examples of different types of households throughout history, and also show how the

household has been conceptualized in different ways. As the reader will see, it has fired

the economic imagination many times and produced interesting but largely forgotten

bodies of thought. It will also become clear that there exist good historical reasons for

viewing the household as a distinct institution in its own right, which is not just limited to

the nuclear family.

In the second half of the paper I will try to explore the possibilities that open up to

think of the economy in new ways, when we use the term household in a broad

institutional sense and when we draw on the bodies of thought that it has inspired

throughout history. Many questions emerge at this point that are hard to give definitive

answers to, but which invite to further discussion. Is it possible to create new types of

household and what would these look like? Can these new types of household replace the

market as the major economic institution? Should they? What would happen to, say,

economic growth if they did? Should one rather try to think of new economic institutions

that have elements of both the household and the market? And what about patriarchy and

the household; did not the oppression of women originate in the household? Did not some

households in the past have slaves? And have not the attempts so far to institute

household economies on a grand scale in modern life – from Soviet Union and onwards –

ended up by creating new forms of oppression? There exist many other questions as well

that need to be discussed, once one decides to take the household approach to economic

life seriously.

Example # 1: The Household in Antiquity

What makes it attractive to start a discussion of the household with presentation

and discussion of the type of household that existed in Antiquity, is that it was at this time

that the first attempt to formulate a science of economics took place; and it was modeled

on the household. Many centuries later the market had pushed the household back and

taken over much of production. Adam Smith and Karl Marx may have little in common,

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but on one thing they agreed: the market was central to the new type of economy that was

emerging in Europe in the late 18th century. The market was similarly at the center of the

new type of economic analysis that was being created to understand the new economy.

In writing the history of economic thought, it is customary to start with a

reference to two classical texts: Politics by Aristotle and Oeconomicus by Xenophon.

This is often followed by a quick dismissal of both; Aristotle for his negative view of the

market, and Xenophon for having written a tedious treatise in agriculture. Both reactions

are understandable: Aristotle spends little time on analyzing the market and he is

basically negative. And Xenophon’s work contains long descriptions on how to sow,

when to harvest and the like, which has no interest for the modern economist.

If one in contrast looks at the analysis of the household (oikos), in Aristotle as

well as in Xenophon, a somewhat different picture emerges. Politics, it turns out,

contains a serious and sustained attempt to theorize the role of the household and to

establish its role in Greek society as a whole. And Oeconomicus, it turns out, contains

one of the most vivid, sharp-eyed and complete descriptions of the household in the

literature of Antiquity.

Aristotle touches on the household in several places of his work, but most

importantly in Book I in Politics (Aristotle 1946:1-38). The key section is called “The

Theory of the Household”, and the title is appropriate since Aristotle’s main achievement

in this part of his work is to theorize the household in a meaningful way. His effort can be

described as follows. He first defines what a household is and what its overall goal

consists of. He then contrasts it on a few points to the art of acquisition or, as we would

say today, money or profit-making.2

One of Aristotle’s major achievements is to have created an early typology of

different economic activities. These are two: those that are related to the art of household

management (oeconomic), and those that are related to the art of acquisition

(chrematistic). While this pair of opposites may seem simplistic, it was later picked up

and elaborated upon by a number of economists and social theoreticians, including Marx

2 The modern word ‘economics’ derives from the Greek oikos (household) and nem (to regulate, administer, organize; cf. e.g. Finley 1973:17).

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and Weber. It represents, in short, a durable and useful way of classifying economic

activities.

A household is described by Aristotle as a large agrarian estate, run by a free man

who also oversees the activities of his wife, children, animals and slaves. Aristotle was

well aware that other forms of economy than agriculture were possible (as exemplified by

nomads and hunters). He does hot, however, discuss these in any detail. Nor does he

mention what methods are needed for different types of crops, as Xenophon does. Instead

Aristotle focuses on on what we today would call the social structure of the household.

A household is centered around three types of relationships, according to Politics.

There is first of all the relationship between the head of the household and

the slaves. Then there is the relationship between the master and his wife. And finally

there is the relationship between the parents and their children. The normative structure

of each relationship is carefully described.

The household has also a crucial role to play in the larger political community

(polis), whose goal is autarchy or self-sufficiency. Aristotle explicitly states that the polis

is not to be seen as a large household; and the reason is that the citizens of the polis are

all free men, something that is not true for the members of a household.

The art of household management differs from the art of acquisition in several

important ways. Different uses of the goods are involved; wants are structured

differently; and their goals are not the same. In a household an item is appreciated for its

practical use, while in acquisition its only use is in exchange. Marx would later call the

former use value and the latter exchange value. He would also, like Aristotle, argue that

the good community can only be constructed on the foundation of use value.

In a household there are clear limits to people’s wants, while in acquisition or

money-making they are limitless. The tendency to never be satisfied, Aristotle says, tends

to unbalance the individual and make him think of everything in terms of money. Those

who devote their lives to the art of acquisition become nervous, dissatisfied, and display

“anxiety about livelihood, rather than about well-being” (Aristotle 1946:26).

The ultimate goals of those who engage in household activities differ from those

who engage in money-making. The latter want ever more money, while the former seek

“true wealth” (Aristotle 1946:21-22; emphasis added). In today’s language, one could

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say that the latter want to be rich. True wealth, Aristotle adds, does not consist of objects

or monetary riches but of people. He does not explain what he means by this, but

presumably true wealth is tied to relationships, while riches are tied to objects.

Aristotle sums up the normative part of his discussion by stating that while

household gains are natural, those of acquisition are unnatural. The former are natural

because they come from animals and plans. Money-making is unnatural because money

comes from money.

Aristotle’s analysis of the household in Politics takes up something like a chapter;

and it portrays the household as part of a larger political community. Oeconomicus by

Xenophon is very different. It can be described as a small book, exclusively devoted to a

discussion of the economic activities of the household.

The style of Xenophon’s work is also different from that of Aristotle. It is written

in the form of a dialogue rather than as a treatise. The argument in Oeconomicus is

constructed via questions asked by Socrates and the answers that he generates. The goal

is more to raise questions and challenge standard ways of seeing things than to suggest

scholarly and analytically useful distinctions, as in Aristotle.

As an example of Socrates’ way of proceeding, one can mention his sparring with

his friend Critobulus in the beginning of Oeconomicus. One issue that is discussed is if

being wealthy and having many objects are the same thing. Socrates says ‘no’. What

matters, he says, is instead the use that you make of something. An object can be made to

enrich you and so can having a friend. But an object can also be used in the wrong way or

not at all; and in these cases they will not add to your wealth.

From passages elsewhere in Oeconomicus it is clear that Socrates disapproves of

having profit rather than wealth as a goal. But while Aristotle goes out of his way to

condemn mere money-making, Socrates is less interested in doing so. What concerns him

more is what makes one household successful, while another fails. One can be on the

right track, Socrates argues, and still go wrong.

By success and failure in this context, Socrates means the quality of the

relationships that make up the household and its use of its resources. Both need to be

handled properly - relationships as well as material objects - if the household is to

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flourish. The subtlety of Socrates’ argument on these two points constitutes the main

contribution of Oeconomicus.

At the heart of the household is the male-female relationship; and only if this

works well, will the household produce wealth. While Socrates, like Aristotle, does not

question the husband’s power over his wife, the emphasis is on the two treating each

other with dignity. If the husband is faithful and respectful of his wife, and if she carries

out her tasks with energy and intelligence, the household will be stable and sound.

Socrates details the duties of the husband as well as of the wife. The husband

spends his day outside the house, where he directs the work on the fields, supervises the

slaves and defends the property. The wife’s domain is inside the house, where she

supervises the domestic slaves, the cooking and the general order of the household. The

husband is in charge of seeing to it that resources go into the household; and the wife will

handle them once they are on the inside. If both do their job well, the balance of the

household will be positive.

Throughout Oeconomicus Xenophon pays close attention to the relationships that

are at the core of the household and how these can be made to work well, with wealth and

well-being as a result. If something goes wrong, he says, the household will be like “a

leaky jar” (Xenophon 1923:427). Xenophon is also closely concerned with the objects in

the household and how these should be handled. The reader of Oeconomicus comes away

with a sense that a household is not only a social arrangement but also something tangible

and material.

The last point deserves to be emphasized. In describing the duties of the head of

the household, Xenophon gives many practical advise about when to start the sowing,

when to begin the harvest, and the like. A household is grounded in the soil; and it is

from the fruits of the soil that its members will live. Similarly, the duties of the wife are

described in rich material detail. In managing the main building of the household, each

room should be used properly. Food and wine are to be in a cool room, the female slaves

should sleep in a room of their own, and the males slaves in another (with a bolted door

between the two).

The good manager of the household should create order in the household, and

order is something that is both positive and aesthetically pleasing:

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How good it is to keep one’s stock of utensils in order, and how easy to

find a suitable place in a house to put each set in, I have already said

[Ischomacus tells Socrates]. And what a beautiful sight is afforded by

boots of all sorts and conditions ranged in rows! How beautiful it is to see

cloaks of all sorts and conditions kept separate, or blankets, or brazen

vessels, or table furniture! Yes, no serious man will smile when I claim

that there is beauty in the order even of pots and pans set out in neat array,

however much it may move the laughter of a wit. There is nothing, in

short, that does not gain in beauty when set out in order. (Xenophon

1923:437)

The contrast between today’s view of the household and the one that was

prevalent in the days of Aristotle and Xenophon is obvious. Today the household is a

social science category and it is defined as a small group of co-residents who typically

share consumption. In Antiquity, on the other hand, it was part of a moral and practical

vision of how to live. Its core consisted of three relationships that had to be handled

properly and with care (the master-slave relationship, the husband-wife relationship and

the parent-child relationship). The goal of the household was a positive balance of

material and ideal resources – wealth, not riches or profit. The household deeply engaged

the body as well as the soul.

Example # 2: The Household and Home Economics

If this article was a history of the notion of the household, there would now be a

section on the medieval manor that emerged after the Roman Empire had disintegrated

(e.g. Brunner 1956). This, in turn, would be followed by a discussion of the way that the

metaphor of the household was applied to the nation state, a few centuries later. The king

was now seen as the head of the national household, supported in this role by sermons

about “the Christian Household” by Protestant theologians (e.g. Hoffmann 1959).

Important elements of the household ideology can also be found in mercantilism, as

theorized by the first professors of economics and later famously attacked by Adam

Smith in The Wealth of Nations (e.g. Tribe 1988, Runefelt 2001). The traditional

household of the peasants remained strong during all these centuries (e.g. Chayanov

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1986, Gudeman and Rivera 1990). And finally there was the creation of the modern

household in the 19th century, when, during the Industrial Revolution, most of production

left the household.

Many readers are familiar with these developments, which have also left traces in

everyday language (e.g. Oxford English Dictionary, 2000-). The idea of the nation as a

giant household is to some extent still present in the notion of the modern state, especially

in the welfare state. It is the task of the modern state to provide for the welfare of its

citizens; it is what has also been called a public household. And in Sweden, for example,

we do not say that we study economics at the university level but “national economics”

(nationalekonomi) – again a reminder that the goal of economics was once to provide for

the nation as a whole.

The migration of production from the household to the factory that began in the

1800s has also continued. The emergence around this time of a new type of economics

that was closely modeled on the household – home economics – is, in contrast, little

known. It only existed in a few countries and it is not mentioned in the standard histories

of economic thought. But despite its status as an ignored and sometimes even ridiculed

branch of economics, it carried on as well as substantively added to the tradition of

household economics. This is one of the reasons why it is worth reviving the memory of

home economics. To do so also allows us to see what modern economic thought missed,

when it emerged in the 19th century.

The first thing that strikes you, when you take a closer look at home economics, is

that it does not fit any of the usual categories for what economics is all about.3 As to its

content, it is part instruction for what to do in a home – cooking, sewing, cleaning and so

on - and part economic theory. It has been taught in universities and colleges, but also in

schools at a lower level (where it is still being taught in many countries). It has also been

studied and practiced by many women on their own and is part of the self-help literature.

Home economics can be described as gendered knowledge, in the sense that it

was aimed exclusively at women. It was invented by women, practiced by women and

3 A huge number of the books, pamphlets and journals that were part of the home economics movement are available on the web. For the electronic Home Economics Archive, see http://hearth.library.cornell.edu.

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mainly (but not totally) abolished by women. While this explains why home economics

has attracted some attention from modern scholars who are interested in women’s history,

and also by feminists, our interest is different (e.g. Fritschner 1973, 1977, Stage and

Vincenti 1997). What is primarily at issue in this paper is what we can learn from home

economics about economics and its possibilities.

The reason why home economics has something important to say on the topic of

economics and the household, is that by the mid-19th century, when home economics

appeared, the household had very much become a women’s issue. Mainstream economics

was already absorbed by its fascination with the market, with production, and with the

goods that were produced in the modern industrial system – and had totally forgotten

about the household (e.g. Swedberg 2008). This not only left a space for home

economics; it also allowed it to develop free from interference, since it was not seen as a

threat to official (male) economic thought.

The origins of the home economics movement is usually traced to the publication

in 1841 of A Treatise on Domestic Economy by Catherine Beecher, an author and

educator of Calvinist origin. Her book quickly became popular and was read and studied

throughout the 1800s. Its main argument was that American women were in a position to

progress, if they applied science and knowledge in a methodical manner to the sphere of

the household. A Treatise on Domestic Economy is in many ways a remarkable work and

since it is forgotten today, there is reason to pause for a moment and briefly present its

contents.

It is sometimes argued that A Treatise on Domestic Economy belongs to the genre

of self help literature. It has also been noted that Beecher’s work can be seen as part of

the ideology of domesticity that was emerging at the time (e.g. Sklar 1976a, b). While

both of these views have some truth to them, there is more to Beecher’s work, especially

if one looks at it from the perspective of economics. In this paper I will try to show that

this by focusing on her vision of the economy.

What Beecher had in mind was not only a knowledge of economic life that is

much broader and quite different from what we today mean by “economics”, but also

what in her own time was known as “political economy”. A Treatise on Domestic

Economy contains a very practical type of knowledge that we already know from

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Antiquity: the art and science of managing the household. But there was also a strong

ethical and democratic dimension to Beecher’s theory, which made her present it in terms

of possibilities for the American woman.

The social theory that underlies Treatise comes from Democracy in America

(1835, 1840) by Alexis de Tocqueville, a work that was very popular at the time.

According to Tocqueville, society is in the process of going from “aristocracy” to

“democracy”. By aristocracy he meant the rule of an elite, and by democracy the trend in

modern society towards equality – equality in the political, economic and social spheres.

What Beecher added to this, was the idea that while society outside the household had

developed very far in the direction of democracy, it was different inside the household

(e.g. Beecher [1841] 1977:39, 107). Aristocratic attitudes and ignorance ruled inside the

household and so did inequality. Just as the natural sciences and the theory of “political

economy” were taught and applied outside the household, so there was a need for a

theory of “domestic economy” to be taught and applied inside the household.

Some parts of Beecher’s doctrine of domestic economy dealt explicitly with what

we today would call economic topics. She says for example that the housekeeper should

be methodical in the way that she handles expenses and carefully record what is spent on

such items as food, clothes, heat and rent (Beecher [1841] 1977:177). But even when

Beecher discusses rather straightforward economic topics, it is clear that she also had her

own vision of proper economic behavior. The reader of A Treatise is, for example, told

that it is the wife and not the husband that should control the family budget. It is also

imperative for the housewife to always be generous, hospitable and aid the poor – and to

teach the children the same.

But the vision of a domestic economy in Treatise goes well beyond what we

today mean by “economic” topics and which typically involve money. Beecher devotes

separate chapters to how to bring up children and how to take care of the sick. There are

also chapters in Treatise on how to cook, clean, take care of one’s body and decide what

kind of clothes to wear. According to Beecher, Americans eat too much meat and

exercise too little. She criticized the U.S. ideal of women with a super thin waist that was

the result of wearing murderous corsets. She was also very interested in the design and

the aesthetic dimension of the family home. Each house, she insisted, should have “a

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light, neat and agreeable kitchen” (Beecher [1841] 1977:366). More generally, the home

should be a place for “comfort” and “welfare” (Beecher [1841] 1977:138).

It has often been noted that while Beecher argued that the household should be

run by women, the world outside the home should be run by men. But this is a truth with

some modifications. According to Beecher, “to make money” and to enjoy what money

can buy, must not be the main objects of life. What first and foremost matters, she said, is

“to form character”; and the place where the character formining process was to take

place was in the household (e.g. Beecher [1841] 1977:263-64; emphasis in text). “Mind,

body and soul” come together in the household – thanks to the methodical application of

the insights of the domestic economy (Beecher [1841] 1977:30).

Thanks to the writings by Catherine Beecher and other women, “domestic

economy” soon became a cultural force in the United States. It was not till the turn of the

century, however, that the new science – now called “home economics” – started to be

institutionalized (e.g. Stage 1986, 1997). The activities of chemist Ellen Richards were

instrumental in this, but federal support for the new science was also important. The U.S.

state supported the trend towards vocational training in the country. It also wanted to

spread modern education to rural areas; and home economics, with its goal to modernize

traditional skills, was ideal for this purpose.

In 1909 the American Home Economics Association was created and The Journal

of Home Economics started to appear. The decision to call the new science “home

economics” did not come without a battle, however. Ellen Richards preferred “ecology”

and “euthenics”, but had to yield. What made the expression “home economics” so

appealing to many, it seems, was that it sounded a bit like “social science” – a term that

was loaded with positive connotations at the time.

The first issue of The Journal of Home Economics contained the following,

account of why the term “home economics” had been chosen and what was meant by it:

After a full discussion there was agreement on the name ‘Home

Economics’ as the title preferable for the whole general subject, and it was

determined to consider it as a distinct section of the general subject of

economics, so that it should find a logical place in the college and

university course and not be confused with the mere ‘Household Arts’

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often taught under larger names. The latter, however important practically

for the general public, could never expect to be recognized as a part of the

university curriculum. While home economics was taken as a general

term, it may be wise to use other phrases for its sub-divisions; domestic

economy might be appropriate for lessons for the younger pupils;

domestic science might be applied in high schools where foods and house

sanitation can be studied by scientific methods, while household or home

economics would be suitable for college courses. (American Home

Economics Association 1909:4)

Home economics was first and foremost successful in the area of education. It

could soon be found all over the United States in elementary schools, high schools and

universities. It drew heavily on the natural sciences as well as on the social sciences.

Chemistry was used to improve food and textiles, and bacteriology to make things clean.

Home economic also shared an interest in consumption with economics; in the family

with sociology; and in child development with psychology.

Many of the students of home economics had a very strong sense of a social

mission. The American Home Economics Association described its goal as “the

improvement of living conditions in the home, the institutional household and the

community” (Stage 1997:17). This quote also makes clear that the ambitions of home

economists went well beyond the private household. It aimed, for example, at “municipal

housekeeping” and was to make significant contributions to public health (e.g. Hoy

1980).

It should also be mentioned that especially one aspect of how to educate young

women for expertise in the domestic household has recently come in for criticism (e.g.

Grunwald 2010). This has to do with the way that babies from orphanages were used for

practice in classes to teach the students “mothercraft” or the scientific art of childrearing.

These programs were initiated in 1919, spread to some twenty universities and lasted till

the 1950s. The children from the orphanages were used for one year in programs of home

economics, during which time they had several young girls looking after them. After this

year the babies were put up for adoption. The first practice baby that arrived to Cornell in

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1919 was named Dicky Domecon – “for domestic economy”, according to Cornell’s

online archives of home economics.1

The home economics movement peaked in the United States around the 1930s.

By now it had a massive presence in the educational system, not only at the lower levels

as in Europe but also at the university level. As an example of this one can cite Cornell

University, which in the 1920s had created a College of Home Economics with an

impressive number of units (the Department of Food and Nutrition, the Department of

Family Life, the Department of Textiles and Clothing, the Department of Household Art,

the Department of Hotel Administration, the Department of Institution Management and

the Department of Economics of the Household and Household Management).

Students who specialized in home economics primarily became teachers. But they

also got some jobs elsewhere in society. They became dieticians and budget managers.

Some worked in the private industry, mainly for corporations that specialized in food and

household goods. Since 1923 there was even a Bureau in Home Economics in

Washington D.C., housed in the Department of Agriculture.

It was also around this time that some people associated with home economics

emerged as important economists in their own right, a fact that is not mentioned in

modern histories of economic thought. Especially two people stand out in this regard:

Hazel Kyrk and her student Margaret Reid, who both taught at the economics department

at the University of Chicago (e.g. Folbre and Pujol 1998, van Velzen 2003, Beller and

Kiss 2008). Kyrk was instrumental in introducing the social sciences, including

economics, into home economics. Reid, who had a degree in home economics, went on to

be a major economist as well and to influence people such as Franco Modigliani and

Milton Friedman (Yi 1996).

Hazel Kyrk’s main work is called A Theory of Consumption (1923) and is written

from the perspective of economic institutionalism. It is a work that has definitely stood

the test of time and is well worth reading today for anyone interested in consumption and

household theory. Kyrk wanted to look at “the world behind the demand curve”, as she

put it, and especially to analyze how preferences are formed (Kyrk 1923:19). Economists,

she argued, equated production with economics and ignored consumption. What was

needed, both to improve theory and to prepare the way for a better society, was rather to

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view things from the perspective of “the whole economic process” (Kyrk 1923:62, 83-4).

To do so meant to bring consumption and production together, and to realize that welfare

was the common goal of both.

Margaret Reid’s major work is called Economics of Household Production (1934)

and it has recently gone through a revival. As the title indicates, what goes on in the

household is analyzed in terms of production rather than in terms of consumption. Reid

famously suggests that one can define “household production” as all the tasks in the

household that can be bought and priced in the market (Reid 1934:11). In a similar

practical spirit she defines consumption as what remains to be done, once the good is in

the store and before it has been consumed. She finally suggested that just as production in

modern society is centered around exchange value, the household is centered around use

value. “Goods are produced for use; and returns are in use value rather than exchange

value” (Reid 1934:132).

After World War II, and especially in the 1960s, the home economics movement

started to disintegrate and to vanish from common consciousness. One indication of this

is that the term itself started to disappear. In 1969, for example, Cornell’s College of

Home Economics changed its name to the College of Home Ecology. Home economics

also drew fire from the emerging feminist movement for being conservative and

backwards looking (e.g. Friedan 1963, Ehrenreich and English 1978). And mainstream

economists had never been interested.

What ultimately caused the undoing of the home economics movement were

probably the structural changes that American society had undergone since the time of

Catherine Beecher and Ellen Richards. What had once been an agrarian and

industrializing society, was by the 1960s a fully industrial society and also a post-

industrial society. As American women were increasingly entering the labor market, the

traditional housewife was beginning to disappear – and with her, home economics.

Example # 3: The Modern Household

So far in this paper I have presented two examples of households and the type of

economic thinking they inspired, one from Greece in Antiquity and one from the United

States in the 19th century. It is now time to look at today’s household, and I will do this

17

with the help of a recent study written by one of the major figures in what is known as

new institutionalism in economics. The author’s name is Robert Ellickson and his study

is called The Household: Informal Order around the Hearth (2008). Ellickson is a

professor of law and mainly known for having applied the idea of transaction costs to law

and legal norms.

In looking for a contemporary study on the household by an economist, one could

also have chosen something from the area of “new household economics” that Gary

Becker and others initiated in the 1960s to much applause. Ellickson, however, has a

more innovative approach than the new household economists, whose basic move is to

apply standard micro economics to household matters. While Becker et al want to

integrate the household into mainstream economics, Ellickson seems more interested in

seeking out new avenues for economic (and legal) thought.

Ellickson states that his interest in the household comes from the fact that this is

the place where humans spend most of their day. He also notes that this is where people

spend most of the time that they value the most. We need to better understand this vital

place – the “domestic microcosm” (Ellickson 2008:1).

According to Ellickson, it is important to realize that a household is neither the

same as a family nor a marriage. A marriage is surrounded by much more stringent legal

requirements than a household, he says, both when it comes to entering it and leaving it.

This has mainly to do with the fact that a marriage usually leads to children. A family, as

opposed to a household, can be spread out over a huge geographic area. It is also

considerable more stable than a household. You may belong to many household in your

life but not to many families.

Ellickson provides the following definition: “A ‘household’ is a set of

institutional arrangements, formal or informal, that govern relations among the owners

and occupants of a particular dwelling space where the occupants usually sleep and share

meals” (Ellickson 2008:1). A household, according to Ellickson, is an institution; it also

has a legal dimension. In our discussion so far in this paper, it deserves to be noted, this is

the first time that a legal element is seen as integral to the definition of the household.

Ellickson also highlights the role of property.

18

There are three central relations to the “institutional arrangements” that constitute

a household, according to Ellickson. First, there is the owner to non-owner relationship;

second, there is the landlord to tenant relationship; and third, there is the occupant to

occupant relationship. This means that one either owns or rents the space for the

household. A household can also exist with only one member.

While Ellickson mentions that a large variety of households have existed

throughout history, including the slave household and the royal medieval household, his

definition fits contemporary times the best (Ellickson 2006, 2008). There are three “core

liberal entitlements” at the very heart of his definition; and we may therefore be justified

in calling Ellickson’s theory of the household for a liberal theory of the household. These

three entitlements are: private ownership; freedom to exit from the household; and

freedom of contract. Together they make possible “a robust system of decentralized

household formation” (Ellickson 2008:14).

Ellickson’s book contains not only an interesting theoretical approach to the

household but also an attempt to survey empirically what the modern household looks

like in the United States and to explain why this is the case. He is in particular eager to

establish data relevant for the three core relations that make up the household

(owner/non-owner; landlord/tenant; occupant/occupant).

The modern U.S. household is typically small in size. The average household had

2.6 members in 2004, while the figure for 1790 was 4.8. Few households in the United

States have more than four members. If you exclude households in which the members

are related as kin, and instead only look at non-family households, 90% of these latter

have only one or two members. The average number of owners is also small, with 90 %

of all private dwellings being owned by one or two individuals. Finally, only a minority

of households rent as their dwelling unit, as opposed to owning it.

While figures vary in different countries, the basic message is everywhere the

same, according to Ellickson: small is good. The average number of household members

in modern times Sweden, Japan and China are 2.0, 2.5 and 3.3 respectively (2005). While

ownership of households can vary between say 80% (Ireland) and 40 % (Sweden),

Ellickson argues that unless the state intervenes, renting tends to be low.

19

Ellickson is well aware that there exist households in modern society that do not

look like the average household of a few persons, of which with one or two are owners.

There are, for example, people who are institutionalized, such as prisoners and the

mentally ill. There also are groups such as students who may live together for some brief

period of time. And then there are people who have tried to create alternatives to the

common household, so-called intentional communities.

Historically, the United States has gone through two periods when important

attempts were made to create intentional communities, according to Ellickson. These are

the Utopian Socialist era (1824-1848) and the Woodstock era (1965-1978), neither of

which succeeded in creating a new and long-lasting types of household. In modern

United States, he adds, there only exist a tiny number of sturdy intentional communities.

The two most successful are the Hutterite Brethren, where the average number of

household members is ninety (most of whom are children), and the Benedectine

settlements, where the equivalent figure is forty (all of whom are adults). According to

Ellickson, research indicates that intentional communities stand a better chance to survive

if the members share a non-secular ideology.

Ellickson also says that according to his inventory of household forms throughout

history, households have few members and few owners. The small number of owners, he

notes, was typical also of the communes that came into being during the Woodstock era.

The question then becomes, why is this the case? Why do household tend to have few

members, few owners, and why do so few people rent their houses and apartments rather

than own them?

Ellickson’s answer is that transaction costs supply much of the answer. The costs

associated with the transactions that go on in a household, Ellickson emphasizes, can be

very high. If there are many members, reaching a decision tends to take long time. If

tastes are very different, finding the right good may be difficult. If something important

needs to be done that affects the property of the household, such as repairing the roof, a

legal contract may have to be drawn up.

On these and similar occasions, according to Ellickson, a small size is much more

efficient in transaction cost terms than a large size. Two-three people can often decide on

things without the help of the law; and a couple will typically arrange tasks in their own

20

give-and-take way rather than draw up a contract. People who are intimate often engage

in gift-exchange. Homogeneity in taste is also helpful in getting things done quickly and

efficiently. The governance of the household is finally handled much more smoothly if

the actors can decide the issues themselves and do not need to take some non-resident

owner into account. This is why most households are owned rather than rented.

Ellickson mentions some recent attempts to create new types of household

organizations. One is co-housing, a form that was invented in Denmark in the 1970s.

People live in their own homes but co-own a place in which everybody eats together at

least a few times per week. More generally, Ellickson says, most modern attempt to

develop new forms of organizations have been of the inter-household type rather than of

the intra-household type.

But Ellickson does not think that any of these new forms will be very successful.

He seems convinced that the small household that is typical of modern liberal society is

also the model for the future. It has shown its capacity to fulfill the needs of its occupants

over many centuries and in many different contexts. Its features are not only proven, they

are probably universal.

Discussion

The discussion of these three examples – the household in Antiquity, home

economics and the modern household – have hopefully shown that one needs to

understand the household in a broader sense than is usually done today. According to the

modern view, to repeat, a household is more or less equated with the modern nuclear

family. The examples and literatures that I have referred to points in the direction of a

broader concept of the household, and also one in which economics plays a significant

role.

An attempt to provide us with such a broad, synthesizing concept can be found in

the work of Max Weber. More precisely, it can be found in his theoretical economic

sociology in Economy and Society. Drawing on his encyclopedic knowledge of economic

history, as well as his talent for theorizing, Weber produced a very useful terminology for

understanding the household in a broad, social science sense.

21

Weber’s concept of householding is part of the conceptual pair “householding”-

“profit-making”. “The two basic types of all economies”, as he once put it, “are

householding and profit-making” (Weber 1923:6).2 In the past it was the household that

dominated economic activity; it “has been the dominant [economic] form in most periods

in the past” (Weber [1921-22] 1978:90). Today, however, the household is overshadowed

by the profit-making firm, which has taken over production and also replaced the

household as a workplace.

Weber defines householding, as already noted, by contrasting it to profit-making.

While householding is oriented to “consumption” and “the satisfaction of needs”, profit-

making is oriented to “opportunities for profit-making”. The formal definitions that

Weber provides in Economy and Society are as follows: “The continual utilization and

procurement of goods, whether through production or exchange, by an economic unit for

purposes of its own consumption or to procure other goods for consumption will be called

‘budgetary management’ (Haushalt)” (Weber [1921-22] 1978:87; cf. p. 89). “’Profit-

making’ (Erwerben) is activity which is oriented to opportunities for seeking new powers

of control over goods on a single occasion, repeatedly, or continuously” (Weber [1921-

22] 1978:90).

Weber further specifies that householding aims at “wealth” and profit-making at

“capital”. This means that the type of calculation that is involved in these two activities is

different. In householding, you periodically look at the difference between what comes in

(income) and what goes out (expenses). In a profit-making enterprise, in contrast, you

want to establish exactly what the assets are worth at the beginning of an enterprise, and

what they are worth at the end, in order to establish the difference or the profit. The

former way of calculation can be called “budget, according to Weber,” and the latter

“capital accounting”.

The household is not more primitive than the firm, Weber emphasizes; it just

emerged earlier in history. Both of them can be managed in a rational way as well as in a

traditional way. The oikos in Antiquity is an example of a traditional household; and a

planned economy of a rational household. The modern firm represents a rational form of

profit-making, while the medieval trading company was traditional in nature.

22

While householding and profit-making constitute two very different types of

economic action, the difference depends more on the mental element with which they are

invested than on the actions per se. “The administration of budgetary ‘wealth’ and profit-

making enterprises may be outwardly so similar as to appear identical”, Weber says at

one point (Weber [1921-22] 1978:98). “They are in fact in the analysis only

distinguishable in terms of the meaningful orientation of the corresponding economic

activities”.

But even if householding and profit-making constitute two very different types of

organizing economic action, they do not necessarily exclude one another. One can find

many examples of mixtures of the two throughout history. An oikos may, for example,

sell its surplus on the market. “In the action of an individual,” Weber also notes, “the two

elements [of householding and profit-making] may be so intimately intertwined, and in

the past have typically been so, that only the concluding act – namely, the sale or the

consumption of the product – can serve as a basis for interpreting the meaning of the

action” (Weber [1921-22] 1978:90).

Elsewhere in Economy and Society, Weber also discusses the fact that the modern

firm emerged out of the family household (Weber [1921-22] 1978:356-98). The family,

he says at one point, could either develop in the direction of the large household of an

oikos or in the direction of the modern firm. At one end of the spectrum of Weber’s

categories, there is the family, and at the other the modern share-holding firm. In the

middle, so to speak, there is the family firm or what may also be described as a hybrid of

household and firm.

What characterizes householding, to sum up Weber’s analysis, is best understood

by contrasting it to profit-making. While the former is oriented to consumption and the

satisfaction of needs, the latter is oriented to exploiting opportunities for profit. The long-

term goal of householding is wealth and that of profit-making, capital. To order the

economic resources of a household, you use a budget, while capital accounting is needed

when it comes to profit-making. While householding and profit-making may result in

different economic actions, they can also result in different institutions. What sets

householding and profit-making apart is finally not so much their outer form; it is rather

the meaning with which the actors invest their behavior (see Fig. 1).

23

/Fig. 1 about here/4

Weber’s attempt to make a social science concept of householding, by contrasting

it to profit-making, is very useful for the purposes of this paper. It brings some order into

a topic that is hard to get a handle on. It also shows that one does not have to identify the

household with the family household, but that the household can be seen as a social

institution that well goes beyond it.

But there are also limits to Weber’s effort; and one of these is that it is not

normative in nature. Weber does not address the issue if householding is good or bad, but

this is necessary if one wants to use the household to improve things. To get from what

“is” to what “ought to be” is often difficult and raises a number of substantive questions.

In this paper I will bypass these, and instead discuss what are the positive qualities of the

household and what are its negative qualities. What I term positive and negative grows

out of the view that a democratic and egalitarian household represents an important value.

After having discussed the positive and negative qualities of the household, I will also try

to outline some practical possibilities of household economy.

The household is positive, in comparison to the market, in at least three ways: it is

closer to people’s needs; it has a better sense for use value; and it has a more cautious

approach to the management of resources. On the negative side, there are similarly three

facts to keep in mind: the household is the traditional seat of inter-personal domination; it

is non-dynamic in economic matters; and it tends to close its members off from the outer

world. One can perhaps add a fourth: the attempts to create new and better households –

on the micro level, as in most utopian efforts, or on a macro level, as in the socialist

tradition – have failed.

Each of these points deserves some elaboration. Before doing so, however, two

crucial facts must be mentioned. It does not seem appropriate to label these advantages or

disadvantages, but they seem to be universally valid and must in any case be kept in mind

when one discusses the household. First, human beings cannot survive without the

household and its economy. They can on the other hand survive without the market

economy, as the historical record shows. Second, all human beings grow up in a

household, and this means that their basic attitudes to economic matters are shaped by

4 For Fig. 1, see the end of this paper.

24

what goes on in the household. The market economy, in short, cannot do without the

household.

The household is closer to people’s needs than the market; and this naturally

constitutes an advantage, if the purpose of the economy is to fulfill the needs of

individuals. A majority of people’s needs – economic, emotional or social – are fulfilled

in or around the household. Only some of these needs can be satisfied on the market. The

market is furthermore not primarily oriented to needs but to demands, backed up by

money; and this makes it less capable of satisfying needs. Finally, some categories of

people cannot by themselves satisfy their needs on the market, but have to rely on other

members in a household in this regard. Examples are children, sick people, the mentally

ill and many old people.

Use value is prominent in the household, while exchange value is what counts in

the market. This means that the knowledge of the way that something is used is more

advanced in the household than in the market. While one can speak of a certain

materiality in relation to the market (say the physical infrastructure of a market place),

the household is its natural center. The reason for this is that physical objects, human

bodies and nature are all present in the household, in all their materiality. In the market,

in contrast, what is most relevant – and this includes materiality – is what can ultimately

lead to a successful exchange.

The central role that usage and the satisfaction of wants play in the household

account for the affinity between the household, on the one hand, and a concern with

food, clothing, housing and design, on the other. Beauty and what is aesthetically

pleasing should be added to this list as well. Usage and the satisfaction of needs also

explain why child care and care for the elderly have traditionally been handled by the

household.

The household, as I earlier mentioned, also has a more cautious approach to the

management of resources. This is not a very clear formulation, but what I have in mind is

that in the market, resources are primarily of interest in so far as they can be used for

something that has an exchange value. If too much of a resource is used up, or if it is used

for some irresponsible purpose, is not of interest – as long as it can be used to generate

profit.

25

In the household, in contrast, what matters is use value; and this means that it

counts among its resources whatever can be used. Some of these resources can be

acquired through the market and others through other means. The household also needs

to know exactly what its resources are, and this is typically done by making an inventory.

While the imperative to make a profit is strong, the household has an even stronger

incentive: to survive physically. Again, this translates into a more cautious approach to

the use of resources than what is the rule on the market. If just-in-time (JIT) is the symbol

for the inventory strategy of modern business, the carefully stocked cupboard is the

symbol for the traditional household.

A last advantage for the household is it that the distribution of resources takes

place in a more personal manner than in the market. The latter is typically impersonal

and, when not impersonal, depends in the last instance on a sale being made. The

household draws on more individualized ways for creating and distributing resources,

such as gifting and contribution according to capacity.

But as we know, the household also has its negative sides. For one thing, it is the

classic site of inter-personal domination. The first example that was discussed in this

paper was the slave-owning household in ancient Greece. Patriarchy was also born in the

household. According to Roman law, the father had the right to sell and kill his wife and

to sell his children (Weber [1923] 1981:48). And in modern times, Amartya Sen has

shown how the unequal division of food between male and female children accounts for

the “disappearance” of more than a hundred million women from the world’s population

statistics (Sen 1990).

It is also clear that while needs are at the center of the household, not everybody’s

needs are equally satisfied and taken into account. The needs of some members are given

priority, by tradition and/or domination. Many improvements in the household have

incidentally come about when some of its actors – young people and women - were given

access to the alternative of the market.

The household also tends to be non-dynamic and sluggish when it comes to

economic growth. If something works, why improve it? In the market, in contrast,

competition translates into pressure for innovations. Something may work very well - but

if there is a possibility to produce something that sells better, the race is on.

26

It is not that the household economy excludes progress and growth. It has

“wealth” as its aim, as Weber says, or “well-being”, if we look at most family

households. But the road to wealth or well-being is long and slow; and the historical

record shows that when it comes to economic growth, the market and capitalism are

vastly superior.

It is true that the market economy is not only dynamic but also leads to

downturns, crashes, recessions and depressions. This does not happen in the household

economy, which is much more stable. But another danger threatens the household

economy: it can easily be trapped in economic traditionalism and stagnation.

The household also has a tendency to cut itself off from the world; and in this way

exclude impulses and information from the outside. Just as the household tends to

economic autarchy, it tends to social autarchy. The values that unite the members of a

household also set up a barrier to the rest of the world. This way there are insiders and

outsiders; different standards tend to emerge for how to deal with those who are members

of the household and for those who are not.

Related to this is the tendency in the household to emphasize the role of the

collectivity – the interest of, say, the family as opposed to that of the individual. The

individual typically has to subordinate his or her interest to the collective household, and

may suffer as a result (e.g. Tilly and Scott 1989). Again, leaving the household may be

experienced as a liberation.

Finally, the record of creating new households is not encouraging. Ellickson goes

through the record of the Utopian-Socialist as well as the Woodstock era in the United

States, and concludes that neither succeeded in creating large communal households that

could replace the small family household. The socialist attempt that began with the

creation of the Soviet Union in 1917 can also be said to have failed. Socialist states that

have not yet disappeared seem about to do so – or to change into a market economy

before doing so.

What possibilities for action does the household approach or a household

economics then open up? To begin with, it seems to me that just as enthusiasm for the

market form since the 1980s has led to discussions as well as to concrete attempts to

change reality, so could enthusiasm for the household form. As the situation stands today,

27

the household has not been very much discussed. Similarly, few attempts have been made

to take its key ideas and use them to create alternatives.

Such a situation would have to take into account that earlier efforts have failed.

One may therefore ask, if the project of creating new households as a way of moving

forward is still a viable option? Presumably one can learn from earlier failures; and one

would therefore want to avoid both the attempt to create large intimate households, as in

the utopian-communal tradition, or to let small minorities be in charge of huge national

households, as in the socialist tradition.

There is also the fact to consider that new household forms are very much needed.

I am especially thinking of two cases: the situation of elderly people and the

environment. A better understanding of the importance of the household form could lead

to a stronger emphasis on letting old people remain in their homes, instead of

encouraging them to move to nursing homes. More and better help with traditional

household tasks – cleaning, cooking, paying bills, taking medicine, and so on - would

allow more elderly people to stay in their homes. Many people also want to die in their

own homes.

Nursing homes could perhaps be improved by deliberately making them more like

traditional households. Ellickson also cites figures that indicate that many old people

prefer to live on their own, rather than with their children. Still, a policy of letting old

people choose the area in which they want to live, so they can be closer to their children

and relatives, might be a possibility. A similar policy might be used for single people

without children, who might want and need to live close to their friends.

Just like there are friends who are primarily linked to what goes on in the market,

business friends, there also are friends that are closer to the household. The former you

interact with in order to carry out your work, and they often disappear once the work is

done. Friends in and around the household are different; and their importance grows as

marriages break up, children move away and one of the spouses die.

But the need for new households is not limited to small-scale households. To the

contrary; there is also a need today for new households that are huge. Could one, for

example, have huge households that are basically ideal in nature, constructed, say, along

the lines of some of the other “imagined communities” that humanity has created –

28

empires, nations and more? The reference to “imagined communities” was made to

indicate that while huge households do have a material side, they are also mental

constructions (Anderson 2006).

And would it be possible to construct a global household, which would have as a

major task to care for the environment? Whether this is possible or not, the household

mentality seems better suited to deal with sustainability and the global environment than

the market mentality. There’s only one earth, and we need to make a careful inventory of

what we have. The resources that must be spent also need to be properly calculated – and,

if possible, renewed. All of these, to repeat, are tasks that seem to fit the household

mentality better than the market mentality.

In discussing the possibilities of household, it also seems important to break out

of the dichotomy of the market versus the household. Both of these two forms, for one

thing, have advantages and disadvantages. They are also closely related, something that

can be illustrated by the fact that the modern firm emerged out of the family household.

In short, new institutional forms can probably be created that are best characterized as a

mixture of household and market elements.

The way to go about creating such mixed forms might be to innovate along the

lines of Joseph Schumpeter (Schumpeter 1934). According to Schumpeter, there is a

crucial difference between an innovation and an invention. An invention means that

something new has been created from scratch; an innovation that a new combination of

already existing elements has been put together. When you are in the business of

innovation, you essentially take what you have and try to recombine it in some novel

way.

Many institutions contain a mixture of market and household elements. The

predominant form of the firm, for example, is still the family firm and not the share-

holding firm. In some advanced capitalist economies, the home or family household is

increasingly being used also as the workplace. According to Ellickson, 5 % of all

household in the United States also serve as the work place (Ellickson 2008:66). For

better or for worse, some sociologists suggest, modern workplaces are also becoming

more like homes, and homes becoming more like work (e.g. Hochschild 1997).

29

Historically, as we recall from the discussion of Weber, mixed household and

market forms are not uncommon. The medieval manor often sold its surplus on the local

market; there is also the cooperative movement, in which people join together in order to

eliminate the profit of the middleman.

Hazel Kyrk has suggested a different way of mixing the household and the market

in her plan for a “social minimum”, as outlined in A Theory of Consumption (1923). She

argued that the overarching goal of the community should be inspired by the household,

while the economic process itself could follow the market model. This is hwo she

phrased her advocacy:

This concept of a social minimum, a modicum of the necessaries,

decencies, and comforts of life, which shall be the right of all and

available to all, is one that is appearing with some distinctness as the basis

of other phases of public policy. It is a concept that appears whenever

there is an attempt at an accounting from the social standpoint, the making

of inventories, and the working out of profit and loss statements for the

whole economic process. (Kyrk 1923:62)

What Kyrk says in this passage can be generalized into an argument that nations

should be run less like nation states and more like “public households”, to use a term that

Daniel Bell has tried to revive (Bell 1976). Today we immediately want to add to this that

the environment demands a global and not a national approach.

The mixture of market and household can also be successful when it comes to

the family household. It was precisely the access to institutions outside the household –

political, educational and economic institutions – that broke down the power of

patriarchy. When referring positively to the individual household, one also needs to make

clear that all the tasks inside the household have to be gender blind, if we are to hold up

the household as a model to follow. By gender blind is meant that the tasks in the

household will be carried out as much by males as by females. None must be linked to

either sex.

The household, finally, also raises the possibility of introducing some of the

economic relations of the household into the market economy and, in this way, counter

some of its negative sides. The household is essentially alien to market exchange with its

30

anonymity or, when not anonymous, to its close relationship to monetary exchange. In

the household one can in contrast find relations that are based on gifting, sharing,

reciprocity and redistribution (see e.g. Mauss [1925] 1969, Polanyi, Karl. [1957] 1971,

Gouldner 1960, Price 1975). These are relationships in which the element of empathy

tends to be broader, deeper and different from what it is in market exchange.

Empathy as wee al this type of relations – gifting, sharing and reciprocity – play

little role in modern economic discourse and, when they do, tend to be understood in a

narrow and formalistic sense. One exception is the work on “caring labor” by Nancy

Folbre, an American economist (e.g. Folbre 2001). Old people and children, she argues,

are treated by ourselves with loving care; and when we hire other people to be in charge

of children and the elderly, we want them to treat be treated with loving care and not just

like customers.

Concluding Remarks: The Possibility of a Household Economics?

This paper began with the statement that modern economics is centered around

the market and that the science of economics has currently an enormous prestige. But it

can also be argued that the attempt to view everything economic exclusively in terms of

the market, has created a narrow and lopsided view of the economy. It has also narrowed

down the options for how to act, based on economics.

I have tried to counter the conventional view of things by suggesting that we may

want to discuss the possibility of a new type of economics - a household economics - to

complement market economics (see Fig. 2). Earlier attempts in this direction, I argue, can

be found, especially in home economics, a type of economics that has been ignored in

economic discussion as well as by historians of economic thought.

/Fig. 2 about here/5

A modern household economics might find some inspiration in the tradition of

home economics, especially in the work of such economists as Hazel Kyrk and Margaret

Reid. There also exist some modern sources of inspiration. One would be the works of

Nancy Folbre and other feminist economists. One can also point to some of the literature

in behavioral economics, experimental economics and on economic emotions. The idea

5 For Fig. 2, see the end of the paper.

31

that people are less rational than what mainstream economists think has, for example,

served the behavioral economists very well. To design institutions for precise, practical

tasks is another idea that suits household economics very well. It is also increasingly

being realized that emotions play an important role in economic life (e.g. Rothschild

2001, Berezin 2005).

The last few years have also seen the birth of a literature on financial education or

knowledge about the economy that is needed in modern society (e.g. Lusardi 2009).

People do not have an adequate knowledge of the stock market, how to plan for

retirement and so on. This type of literature, it seems to me, could easily be linked up to

some of the concerns of home economics – and in this way create a really interesting

field of economic education for citizens. Economic socialization in another topic that is

closer to household economics than to market economics.

While home economics was created through a practical social movement,

mainstream economics was an academic product through and through. A new household

economics would fare well, I think, if it could share some features of both and situate

itself in the camp of serious theory as well as of serious practice. Household economics

may also want to be explicitly normative and belong to the category that is known as

moral economy (e.g. Thompson 1971).

The basic ideas of household economics may already be present all around us –

not only in some of the works just mentioned by Folbre et al, but also in the economic

ideas and practices of various groups and people. To be truly effective, however, these

ideas need to be brought together and sharpened, through discussion and in other ways. In

this manner a new household economics nay arise in the near future.

32

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Fig. 1: Max Weber’s Distinction between Householding and Profit-Making

Householding Profit-Making

Short-term Goal consumption, satisfac- seize opportunities for profit tion of needs Long-term Goal wealth capital Form of Calculation budget capital accounting Institutional Expression individual household, profit-making enterprise,

oikos in Antiquity, capitalist economic manorial economy system planned economies

Comment: According to Max Weber, economic actions and orders fall either into the category of householding (Haushalt), profit-making (Erwerben) or a mixture of the two. Source: Max Weber, Economy and Society, pp. 86-100.

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Fig. 2. Possibilities of a Household Economics?

ECONOMICS

oeconomia chrematistics (householding) (moneymaking, profit-making)

welfare state possibilities home economics modern economics economics; of a household or market economics socialist eco- economics? nomics Comment: The ideas about economic life were originally centered around the household,

but later shifted to profit-making and related activities, as economics became a modern science. Theories that emphasize the household include the ideas of oeconomia in Ancient Greece, home economics, socialist economics and the economics of the welfare state.

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1 We know about this today very much thanks to transmedia producer Nonny de la Peña who since 2009 has had an ongoing film project on this subject, “Truth and Consequence: The Practice Babies”. The practice also came to more general knowledge through the publication in 2010 of a novel in which the main character is a person who originally was used for training in home economics, The Irresistible Henry House by Lisa Grunwald (see also Grunwald 2010). 2 The German term Erwerben is rendered as “profit-making” in the standard edition of Weber’s work (by Talcott Parsons) and as “exchange” in the new translation (by Keith Tribe). For Haushalt Parsons uses “budgetary unit” and Tribe “householding”. I will be using “profit-making” and “householding”, since I am interested in a sharp contrast between the two. An argument can, however, be made that acquisition or exchange better captures Weber’s original term. See Tribe forthcoming. – The two other major theoreticians of economic sociology – Karl Marx and Karl Polanyi – attached much less importance to the household than what Weber did. While Marx emphasized the importance of the family as the producer of labor, the household and household labor are largely absent from Capital. Polanyi appears to have contemplated having “householding” as one of his forms of economic integration, but decided against it (e.g. Polanyi [1944] 1957:55). Instead he decided that householding was part of redistribution. Examples of householding, according to Polanyi, include “the Central African kraal, the Hebrew Patriarchal household, the Greek estate of Aristotle’s time, the Roman familia, the medieval manor, or the typical large peasant household before the general marketing of grain” (Polanyi [1957] 1971:254).